BlackRock Advisors Slapped With $12 Million SEC Fine

WASHINGTON (CN) – BlackRock Advisors will pay $12 million to settle an SEC complaint of failing to disclose a conflict of interest of a portfolio manager who ran another business. In the cease and desist order, issued Monday, the SEC said that Daniel J. Rice III was managing energy funds at BlackRock when he founded and invested $50 million into Rice Energy, a family owned and operated oil and natural gas company. “Rice Energy later formed a joint venture with a publicly traded coal company that eventually became the largest holding (almost 10 percent) in the $1.7 billion BlackRock Energy & Resources Portfolio, the largest Rice-managed fund,” the SEC said in a statement announcing the settlement. The SEC said that BlackRock “knew and approved of Rice’s investment and involvement with Rice Energy as well as the joint venture, but failed to disclose this conflict of interest to either the boards of the BlackRock registered funds or its advisory clients.” BlackRock’s former chief compliance officer Bartholomew Battista will pay $60,000 to settle the charges against him.